The oxic-settling anoxic (OSA) process interchanges activated sludge between alternating redox conditions (e.g., aerobic and anoxic) to reduce biosolids production. Iron salts addition to wastewater is performed to remove phosphorous, but this study demonstrated that it may impair OSA performance. Batch test results showed that the addition of iron salt (as Fe2+) decreased the volatile solids reduction of an intermittently aerated batch reactor (i.e., aerobic/anoxic), probably because iron reduced the destruction of extracellular polymeric substances (EPS) that serve as the structural framework of sludge flocs. The effect of different FeCl2 dosages (0, 15, and 30 mg l−1) on the sludge yield and EPS profile of an OSA system consisting of a sequencing batch reactor (SBR) attached to external aerobic/anoxic and anoxic reactors was compared to those of a control system consisting of an SBR attached to a single-pass aerobic digester. The two SBRs were fed with real wastewater and operated continuously in parallel for 230 d. Without FeCl2 addition, the sludge yield (g MLVSS g−1 COD) of the SBR in the OSA system was 24.8% less than that of the control SBR. Moreover, the waste sludge of the OSA system had lower volatile solids content than that of the control system. When 15 or 30 mg l−1 FeCl2 was added to the influent, OSA was unable to decrease the sludge yield of the SBR and the volatile solids content of the waste sludge. FeCl2 dosing increased the EPS concentration of sludge in the external aerobic/anoxic reactor, confirming that floc destruction in that reactor was reduced by the presence of iron.